M/s SHE LOUNGE v. THE DEPUTY COMMISSIONER & ORS.

Introduction

This judgment of the Kerala High Court reiterates the legal principle that a separate Show Cause Notice (SCN) and adjudication order must be issued for each assessment year under the GST regime. The Court held that issuance of a composite SCN covering multiple financial years is legally unsustainable, as each assessment year constitutes an independent unit of assessment requiring separate determination of tax liability.

Relying upon the Division Bench decisions in Joint Commissioner (Intelligence & Enforcement) v. M/s. Lakshmi Mobiles Accessories and Tharayil Medicals v. Deputy Commissioner, the Court quashed both the composite Show Cause Notice and the Order-in-Original, while granting liberty to the Department to initiate fresh proceedings by issuing separate notices for each assessment year. To safeguard the interests of the Revenue, the Court directed that the period from the impugned order until receipt of the certified copy of the judgment shall be excluded while computing limitation for fresh proceedings.